International oil prices fall… gold and silver rise

Impact of expectations of increased Venezuelan oil production

Although geopolitical tensions escalated due to the United States' arrest of Venezuela's president, international oil prices instead fell.

According to Bloomberg, Brent crude futures, the benchmark for the international oil market, fell to $60 per barrel, down 1.2% from the previous session at 8 a.m. on the 5th Korea Standard Time. It then rebounded and moved in the $60~$61 range. West Texas Intermediate (WTI) futures prices also slipped to $56.56 per barrel, down about 1% from the previous session at 8 a.m. that day.

International oil prices fell… gold and silver rose. Amrita Sen, founder of consulting firm Energy Aspects, analyzed, "The prevailing view is that U.S. intervention will accelerate the return of Venezuelan oil to the market, and such expectations are exerting downward pressure on oil prices." The oil confirmed to be in Venezuela's reserves exceeds 300 billion barrels. It is the largest in the world. Currently, oil production is only about 1 million barrels per day. It is less than 1% of global oil supply.

Prices of safe-haven assets gold and silver rose. According to Bloomberg, as of 3 p.m. that day the spot price of gold was trading at $4,409.06 per troy ounce, up 1.77%. At the same time, the spot price of silver was $75.35 per troy ounce, up 3.48%. Nikki Shields, head of research at precious metals refiner MKS PAMP, said, "The market has no choice but to assess not only the Venezuela risk but also the unpredictability of the United States and its military approach."

Reporter Joo-wan Kim kjwan@hankyung.com